Mulch for drainage?

Hi all, not sure if this is the right sub or if I should be in a landscaping sub. Maybe both? But thanks in advance for any help.

A few years ago, my wife and I dug out a 20x13 area of the yard for a garden. The first year, it was overtaken by weeds. The second year, I added some boxes to help control things.

But, my question actually is about the area around the boxes.

The last two years we've had major flooding issues in it. I think when we dug out the area, we created a low spot in the yard and all the rain water and snow melt just collects there.

Trying to fix this, we've come up with two solutions. (Well, my wife has come up with one and I've thought of another, but don't want to say anything unless I have some other opinions about it. Cause most likely, she's right.)

Option 1- fill the area with topsoil, until its even with the rest of the yard.

To me, this is just going to create more of an area for weeds to grow.

Option 2- fill the area with mulch. I think with how deep we dug it, the mulch would help sniff out most weeds. But, I'm worried that water would continue to pool there.

Am I missing a third option?